The Federal Reserve’s decision to hold off on an interest rate hike, ongoing economic weakness and concerns over trading revenues have weighed on the financial sector’s outlook.
Given the recent spike in volatility, market participants anticipate larger swings than usual this earnings season. While bank shares move about 2% after an earnings announcement, swings one-and-a-half times the average are expected ahead.
“Participants are bracing for a bit more volatility than in past quarters,” Fred Ruffy, strategist at options analytics firm Trade Alert, told Reuters.
Financial Services Select Sector SPDR
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Max Chen contributed to this article.